Tough year for Norwegian music industry

The music industry’s success in 2002 did not continue into 2003. Phonogram sales were down 8% and not since 1993 have Norwegians bought less music. Only Norwegian artists are increasing their share of market, as well as music on DVDs.

The year started so promising, as sales the first six months were up 6% compared to 2002. The positive trends in Norway were in stark contrast to most comparable countries, which experienced declining phonogram sales. But the trends turned negative as the year came to an end. Not even the Christmas season could help out the industry.

Compared to 2002, the volume of consumed music is down 9% and the value is down 8%. Totally, 13,6 million albums, singles, and DVDs were sold in 2003, according to numbers from the Association of Norwegian Record Distributors. The total turnover in 2003 was NOK 905 million ($ 134 million/€106 million).

Classical repertoire accounts for 4% of the total market, and Norwegian artists have increased their share of the market. Norwegian artists occupy 20% of consumed music units, 1% more than 2002. Sale of music DVDs in 2003 is estimated to NOK 34,4 million ($ 5,1 million/€ 4 million), which is a staggering increase of 64% compared to 2002.

Norwegian music industry’s finest years were between 1997 and 2000 as the turnover passed NOK one billion, according to Norwegian daily Dagens Næringsliv. Since 1997, the turnover for phonograms have decreased, even though private consumes in the society has increased 5% from 2000 to 2002, according to numbers from Statistics Norway.

Music downloads have been the common explanation for the downturn in the industry. But file sharing on the Internet will probably not give us the whole picture.A few more arguments need to be added, according to Eddie Nygren, Director of Finance in Universal, Norway’s largest record company.“This is also about DVDs. The new medium occupies another share of households’ entertainment budget,” Nygren said to Dagens Næringsliv.A third reason for the crisis in the industry is that traditional superstars have not been as successful as earlier. “New talents are hard to find and expensive to establish”, Nygren said.